Rental Market Update

You can’t beat Wellington on a good day. And when it comes to investing in property, it seems like Wellington is definitely having a good day.

Despite no recent changes in the national average rent, Wellington’s market has remained strong and shows no signs of slowing down. Investing in property has, and always will be, about the numbers.

Failure to make the numbers work means you have failed at investing. 📉

So, what are the key numbers that you need to know about Wellington’s rental market and where should you be looking to invest next?

It seems as though Wellington’s property management market has been going from strength to strength lately.

The demand for property in the capital city remains, with the national rental price staying the same for the last ten consecutive months and up only 2.3% on the same month last year, you would expect that Wellington aligned itself with the rest of the country. 🏘️

Quite the contrary, Wellington’s market has risen 9.8% in comparison with the same month a year ago and was only beaten by Northland, the Bay of Plenty and Gisborne as the highest performing rental market across the country.

Such strong numbers from the Capital confirm that Wellington remains a strong place to invest, with rental returns seemingly increasing month on month. 🤑

Historically, November to March has been the peak time for Wellington’s rental market. A result of the annual leases expiring and the influx of students, it is the perfect time for landlords to re-evaluate their portfolio and the rents they can charge.

Homes with five or more-bedrooms in Wellington saw a drop in rent by 5.4% in September of 2017; the only property type to see a reduction in rent. In keeping with tradition, three to four bedroom properties saw an increase of 8.3%, moving up to a median of $520 per week.

The strongest growth, however, was for the owners of one and two bedroom properties. Rising by 10%, these properties were the strongest performing compared to this time last year, and owners of these properties are encouraged to review their tenancies and the rents that they are charging.

Up 9.2% in September compared with the same month last year, apartments, inner-city townhouses and units all remained popular with tenants. Apartment living saw an increase of 3.6% while units rose 11.1% and townhouses a massive 12.5%.

Wellington’s urban market boomed comparatively with the rest of the country, dwarfing Auckland’s 2.2% urban increase and the national 3.8% rise.

What these numbers show us is that city living is fast becoming a priority for tenants and Wellington is becoming an increasingly popular place for people to live.

Despite concerns that the election would potentially dampen the growth of the rental market, Nigel Jeffries from TradeMe has said, “We expect to see some large increases early in the new year as a large number of leases come up for renewal and the university year kicks into gear and boosts rental prices. Many landlords choose the summer months to review their investment and rents jump as a result.”

One of the key reasons that Wellington’s market can expect a jump could be the ‘Warrant of Fitness’. ✅

While the uptake for this has been slow, owners of properties with a Warrant of Fitness could begin to charge more for their rental properties as tenants will be looking at property that is of higher quality than the rest of the market.

All in all then it is clear that Wellington remains a strong place to invest. A capital city where there will always be demand for property as well as strong rental returns, which shows no signs of slowing down.

You really cannot beat Wellington on a good day! ☀️

If you are looking for ways to expand your current rental portfolio, are looking at getting into property investment for the first time, or simply want to know a little more on how you can increase the rents across your portfolio, give our Business Development Manager at Tommys Rentals, Jack, a call today on 04 979 6363.